PULSE POINTS
WHAT HAPPENED: PJM, the largest power-grid operator in the U.S., is facing a supply crisis due to the rising demand from artificial intelligence (AI) data centers.
WHO WAS INVOLVED: PJM, tech companies like Amazon, Alphabet, Microsoft, and state officials.
WHEN & WHERE: January 2026, affecting a 13-state region from New Jersey to Illinois.
KEY QUOTE: “The reliability risk is across the street.” – Former Federal Energy Regulatory Commission (FERC) chairman Mark Christie
IMPACT: Potential for rolling blackouts and increased electricity rates for consumers.
IN FULL
The United States is experiencing a significant strain on its largest power grid operator, PJM, due to the increasing demand from artificial intelligence (AI) data centers. These centers, particularly concentrated in Northern Virginia, are consuming vast amounts of electricity, pushing the grid towards a potential supply crisis.
PJM serves a 13-state region spanning from New Jersey to Illinois, supplying power to approximately 67 million people. However, as older power plants are decommissioned faster than new ones can be built, the grid is quickly nearing its capacity limits, especially during periods of high demand. This situation may force PJM to implement rolling blackouts during extreme weather conditions to protect the grid infrastructure.
Former Federal Energy Regulatory Commission (FERC) chairman Mark Christie highlighted the immediacy of the threat, stating, “The reliability risk is across the street.” PJM anticipates a 4.8 percent annual increase in power demand over the next decade, a stark contrast to previous years of stagnant growth.
The increase in electricity rates has angered consumers, while tech giants like Amazon, Alphabet (Google’s parent company), and Microsoft resist proposals requiring data centers to either build their own power sources or reduce operations during demand spikes. It is worth noting that Microsoft has partnered with energy provider Constellation Energy to reopen the functional nuclear reactor at Three Mile Island, which will be used, in part, to power its AI operations. However, the issue of strain on the physical grid infrastructure remains.
Efforts to address the grid’s challenges have stalled due to disagreements among PJM executives, tech companies, and power suppliers. An independent electrical market monitor has called for federal intervention, warning that without sufficient power infrastructure, PJM may have to allocate blackouts instead of ensuring reliability.
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